I love data and if you have a business, you should too. Data shows us what people like and don't like about our digital marketing strategy. It informs what sales tactics are gaining traction. It can tell us how satisfied our customers are or if employees are performing. It informs us where to spend money. And, it makes our investors and stakeholders happy (or angry).
Harnessing data is the most important growth tool in our toolbox.
Why do so many founders and business owners dismiss the importance of doing regular data reviews? It may be because the amount of data we have at our fingertips is overwhelming and trying to analyze it all in a meaningful way is extremely time-consuming.
A typical approach for most business owners may look like this:
- Taking (reluctant) peeks at google analytics on a sporadic basis.
- Paying moderate attention to email campaign performance.
- Obsessing over daily Shopify sales revenue results.
Everything is disparate and siloed. Nothing, in particular, is being tracked in a way that shows the whole picture.
Another mistake I see entrepreneurs making is that aside from (maybe) your marketing manager, the team is unaware of business performance metrics nor privy to any targets you plan to reach. Affecting those data points will be even more difficult if you don't have a holistic strategy and intentional team effort to do so.
BONUS TIP: If you're looking for a way to pull data from various sources into one place on a master dashboard, I love using Databox.
Intentional and Consistent Data Reviews
Data should be reviewed consistently and over time. Typically, I find that it takes at least 3 months before the numbers really begin "speaking" to you about trends. Data should tell a story but in order for that to happen, it's crucial to determine what metrics are relevant to your business goals. If you are a startup with a small team and limited resources, I would suggest honing in on only a very few pieces of data.
To begin the process of understanding which metrics are important for your business, you must first revisit your goals. What are you trying to achieve in your business? Are you looking to grow subscribers to your YouTube channel? Followers on Instagram? Loyal fans to your email list? Or are you just looking to grow revenue? Whatever the motivation, it's necessary to distinguish between lagging vs leading metrics.
Lagging vs Leading Metrics
Leading and Lagging indicators are data points that describe cause and effect. If you think of your business as a car, the leading metrics would be what is in front of you and lagging metrics represents all that is in the review mirror.
It's typically easier to identify your lagging metrics. These are your goals and targets for the quarter/year. Examples are website traffic, total sales, and email list growth. The metrics tell a story of what happened. They are wonderful for measuring overall performance but unlike leading metrics, there is nothing you can do to affect the outcome.
Leading metrics tells the story. They are typically more difficult to identify because they are the smaller actions, feelings, or conversions that created a result. Many times leading metrics aren't easily tracked-- such as customer satisfaction or confidence. It may feel that you need psychic ability to identify these metrics but the truth is there is an easy place to start. Conversions rates.
Affecting Conversion Rates
Working to improve your business' conversion rates is a noble pass time. It is a metric that we can greatly influence and it is where the real work for a marketing team begins. I'll give you an example:
You are interested in growing your sales revenue (lagging metrics) for your e-commerce store. You determined that growing your website traffic (lagging metrics) would be increase sales.
Then, you pour money into google ads and get more traffic but your sales have not increased as you would like. What went wrong?
Now you understand that the conversion rate of your website (leading metrics) could be affecting the outcome. Now you have a place to start experimenting. You and your marketing team can perform A/B testing on new designs or improve the user experience (UX) to see how you can increase that conversion rate number. This is how you actually increase sales.
Why track data?
By tracking data and determining our leading and lagging metrics, we are able to understand what to do next. Instead of throwing spaghetti at the wall to see what sticks, we can begin to learn what is and isn't working in our business. Then, we can manufacture solutions to increase the effectiveness of our marketing and sales efforts for better results. This is how you truly grow your business.
💬 Let's talk. Hi! I'm Victoria, Growth Hacker, and Virtual CMO. I create and manage sales-focused marketing strategies. Let's schedule your free 30 min strategy session where I'll share tangible, tactical advice on how you can create or improve your marketing plan. Book Now.